The worst statistic of all: the vast majority of employees never exercise their stock options. According to this article, less than 5% of employee stock options are ever exercised: https://medium.com/@henrysward/broken-cap-tables-bbf84574a76... Start-ups would love for you to take a lower than market rate salary in exchange for options as the risk is entirely leveraged to the employee.

If you are going to work for a start-up you should never count your options as payment in lieu of salary. They are a lottery ticket and they are no substitute for cold hard cash. There are various other good reasons one might have for joining a start-up, but options should not be one of those reasons.

Hahahahahahaha. Haha. Ha. Are you serious? For an early non-founder employee, startups might as well be scams.

If they try to convince you that you don't deserve that much because the value of the company will rise in the future, ask them where the signed term sheets for the next round are.

So if the company raised money at $10MM and you're being offered 0.5% equity, then treat it as a $50,000 bonus that you get for being a loyal employee over the vesting period.

If you are offered little equity as compared to the founders, don't join. If the founders won't share the financials of the company with you, don't join. If they wont pay you the salary you want, don't join. If they wont offer you the opportunity to grow into the role you want, don't join.

And you can't argue that every company is like this, because once upon a time I was employee #1 of an early stage startup and your post doesn't align with my experiences at all.

I'm not taking anything away from founding a company, I think in many cases that is a great idea. But being an early employee isn't such a horrible deal if you are selective in what jobs you take.

Tu quoque: "If you find out the car has water damage, don't buy it. If you find out the car was in an accident, don't buy it. If you find out the car was stolen, don't buy it."

Nobody wants to buy such cars; people are effectively tricked into buying such cars by the information assymetry inherent in the market. This is why there are lemon laws.

And just because there are good used cars for sale, doesn't mean it isn't a market for lemons. The good cars (and jobs) sell and sell quickly, while the bad cars (and jobs) stay on the market—so the market becomes saturated with bad cars/jobs, and the actual good cars/jobs become so rare that people invest more in pursuing them than they're worth, creating a sort of dollar-auction market failure.

> The good cars (and jobs) sell and sell quickly, while the bad cars (and jobs) stay on the market—so the market becomes saturated with bad cars/jobs, and the actual good cars/jobs become so rare that people invest more in pursuing them than they're worth, creating a sort of dollar-auction market failure.

This, at least in my experience, is exactly what happens with musicians seeking bands.

The market for especialized labor is full of lemons on both directions. Yet, we don't get any coordinated action to increase transparency.

Lots of people don't join startups because of these reasons - which is exactly why she wrote this piece, in an effort to convince more people to consider startups.

There is no "if". Employee equity is always a small fraction of founders'. This won't change until people realize the discrepancy, or demand more equity at early stage startups.

For instance, one thing people mention here is "experience" - that you gain experience working for a startup that you wouldn't get at a big company. You only might.

Ask yourself: Are you pitching investors and making contacts? Are you meeting with the lawyers to nail down legal issues? Are you negotiating office space? Setting up equity arrangements and deals? Managing PR? Getting users? Or are you mainly just handling technical issues, while those tasks are kept from you. I know a lot of managers like to say they handle the business side so that engineers can focus on the important stuff, but keep in mind, when the storm hits, you may find, as you stand in the rain and 70mph winds without roof or even an umbrella, that all you were really protected from seeing was the forecast.

I've worked at a couple of startups, and they really didn't expose me to much about running a business. They did expose me to new and interesting technical challenges, and to that extent, I did get something out of it, but certainly nothing more than I would have gotten out of working for a big name company like Google or Facebook.

Really, if your big goal is to learn how to start a startup, I doubt you'll get that by working for one as an employee, even an early one. If you want to prepare for your second startup, I doubt there's better preparation than starting your first one.

However, if you are totally fresh and want to gain some experience, it can be worth your time. The market for developers right now is such that you may not need to take such a pay cut vs a bigger company. This is the real variable. What are you giving up. And while you may work about as hard as a founder, you aren't as likely to wind up ruining your credit and destroying relationships with family and friends due to the incredible stress.

So it may be worth it for the experience. Just don't get sold on being an early employee as a path to riches via your equity. That path is vanishingly rare.

In addition, it gives me the opportunity to affect the culture of a company and help the environment be run the way I want it to be. There is a lot of work to be done, but it's the same in any non-big company.

The stability isn't as much of an issue to someone like me, since I have plenty of contacts I can reach out to if I don't like the looks of things - I've gotten in person interviews set up as short as a few hours. The salary isn't as much of an issue when I am investing in myself and preparing for a larger salary down the line due to outsized responsibilities. The equity may not be as much, but it doesn't need to be founder level to be good enough, and also there are other concerns for a founder - increased dilution and the incredible early stress fundraising & networking is not something I necessarily might want right now.

Not everyone necessarily has the skills to be a successful founder (or co-founder) - personally, I may choose to found my own company down the line, but it will be in what I want. In the meantime, working as an early employee is ok to me.

Has the term senior lost all meaning?

Based on the post above, Bahamut's senior title is also a function of the responsibilities he's dealing with - in this case, building the first viable product of the company at an architectural level, and overseeing the completion of major features from start to finish. Just like the crop of startup CEOs in YC, his title has nothing to do with his previous experience. If the leadership of the company has decided he's fit to train new engineers and prioritize tasks for them, the "lead" description is apt too.

I'm sure there are much more skilled CEOs and much more skilled lead developers at other companies, but it's completely impractical to compare people based on internal titles. We're talking about descriptions of an employee's role in the context of his or her own company - don't read anything more into titles than that.

In my case, I continually hone my craft outside of work (with some breaks here and there) - I spend a lot of time learning, digesting new patterns, and assessing then. I read articles, and spin up many projects to experiment hands on with the technology, patterns, etc. My abstract depth was already sharpened from my time as a math PhD student (ultimately dropped out), and spending 2 1/2 years unemployed from having trouble finding work whetted my appetite for working to an insatiable degree. The Marine Corps enhanced my innate leadership traits, which I then took the lessons learned and applied them to leading a team (which I had to do as an acting tech lead when the tech lead had to take leave due to a family death), as well as generally carrying myself.

I earned the senior title through domain expertise at an exceptional level, and with a bit of luck achieving it in a piece of tech that exploded in popularity just afterwards (AngularJS). I have been seriously recruited as a lead developer for about a year, although I have turned down such positions for a while since I did not consider myself ready at the time.

The one thing I appreciate about being in the Bay area is that companies here recognize that such talent can exist, and such people may not even be unique. In most of the country, I probably would be still a mid-level developer, and not given the opportunity to demonstrate I would be a capable senior developer, much less lead developer.

And it's definitely not a bad experience (of course it's fast paced)

cmd-f: "You'll make more money and have more impact"

But not everyone is cut out to be a found or has a good idea they can execute on. For those people being an early employee is the best they can do. It's also incredibly more stressful being a founder and a lot of people don't want that. They are happy to take a lower than market salary in exchange for lottery ticket (equity).

You see founders parachute straight into consulting or speaking after flaming out of their tech startup. Their team needs to go get jobs.

I can't speak for everywhere on earth but in this current Bay Area tech job market, I can just as easily parachute into a well-paying, full-time gig at $TRENDY_TECH_COMPANY. You build interesting experience & insight being the first-hire and, if you're actually a skilled engineer, shouldn't have a problem finding your next job in about 4 to 6 weeks if things don't work out.

Management consultants make a lot more than code jockeys do.

I'd go off and found a startup tomorrow if I had some way to keep paying my mortgage and feeding three mouths for however many years it took to adequeately replace my current income.

If you want a ton of equity, start a company, but don't expect a paycheque. If you want a paycheque and a lot of equity, join an early stage company.

Yeah, they'll get some, but they won't exactly be retiring after the IPO because of it.